South Korea is still sending tourists to a mountain resort in North Korea and maintaining a joint economic zone, despite pressure to cancel the projects after the North's nuclear test.
The country has its reasons for refusing to shutter key projects that help keep Kim Jong-il's regime afloat, including competition with China for influence over the nation.
South Korea and China together account for two-thirds of overseas trade for the North, and the South Korea hopes to one day reunite the two Koreas.
The US has scoffed at the tourism venture at the North's majestic Diamond Mountain resort, saying the project simply hands money to the North's government. Washington also has questioned labor practices in a joint economic zone where northern workers provide cheap labor for southern firms.
But Seoul has been reluctant to enrage the North as it pursues its policy of reconciliation that has led to unprecedented cooperation between the two countries.
Totally cutting off the joint projects also would mean Seoul would lose influence in the North, leaving the nation wide open for China -- the North's No. 1 trade partner and a key source of aid.
US Secretary of State Condoleezza Rice has said she will not presume to tell South Korea or China how to enforce UN sanctions imposed against Pyongyang after its Oct. 9 underground blast.
But she has called on all nations to cooperate and pointedly noted in a South Korean TV interview on Friday that the North ``set off a nuclear weapons test right here in South Korea's backyard.''
``It is important to use whatever leverage a country feels that it can use to get the North Koreans to make the right choice'' to rejoin arms talks and disarm, Rice told KBS in Seoul.
Seoul is keen to maintain stability and not let its unpredictable neighbor spoil its hard-won prosperity built from the ruins of the Korean War. Today's South Korea is a high-technology mecca and cultural trendsetter for Asia, proudly proclaiming itself as ``Dynamic Korea'' in its main tourism slogan.
The inter-Korean projects are part of Seoul's strategy to use trade and exchanges to ensure that success is not wiped out by a war or a chaotic collapse of North Korea. The North has needed foreign assistance to feed its 23 million people since the mid-1990s, when its state-run farm system collapsed after the loss of Soviet subsidies.
But in the wake of the North's first-ever nuclear test, Seoul has faced new calls to cancel the landmark reconciliation projects.
On Tuesday, the US envoy on North Korean human rights, Jay Lefkowitz, warned that unmonitored assistance to the North could prop up a "criminal regime."
China has made increasing economic inroads in the North in recent years, and South Korea has expressed concern that North Korea could become a de-facto Chinese province.
Chinese goods are the dominant products in what passes for markets in the North, and Chinese tourists visit regularly.
A state-supported Chinese think tank has claimed that two ancient Korean kingdoms were actually Chinese, including the Koguryo dynasty that reigned from 37BC to 668 in an area that stretched from the Korean Peninsula to Manchuria in northeast China. Koguryo is viewed by Koreans as the origin of their nation, and its name forms the root of today's "Korea."
China had its fingers in Korean politics going back centuries, under the tributary system in place across east Asia.